One big idea we keep coming back to at Cantina is that every organization is always in tension between the need to exploit and to explore. Organizations must exploit existing capabilities while simultaneously exploring new, unknown opportunities. This idea, first outlined in the 2004 Harvard Business Review article, “The Ambidextrous Organization,” is one of the toughest managerial challenges any organization faces.
Most organizations are built (structurally and culturally) to focus on the exploit—or efficient—side of the spectrum. This is where alignment, predictability, and productivity exist. And indeed, incremental improvements to efficiency often increase effectiveness and profits. Six Sigma is one widely known example of a methodology dedicated to increasing efficiency. It is based on the idea that if a process is well-defined and well-executed, it will produce close to the theoretical perfect result.
But, stand still too long, and no amount of perfect efficiency will prevent disruption from without. This is why, in the eighteen years since the publication of the Ambidextrous Organization, leaders have redoubled their efforts to counterbalance efficiency with innovation. It doesn’t come easy. So-called corporate antibodies fight against the disruption to efficient operations that innovation activities present. This means that, in practice, innovation has to both execute on a new idea that creates value and also manage the turbulent gap between efficiency and change.
In our innovation consulting work, we’ve found ourselves in a privileged position to work with a variety of successful leaders, leaders who somehow manage the exploit-explore tension with a surprising ease. This has given us a front row seat to see what makes them different. Below are a few of our observations.
First and foremost, these leaders are commonly outsiders who aren’t afraid to disrupt the status quo. Organizations tend to build up their own ‘geological’ strata. Whether centered on process, system, or culture, peeling back the layers to recover and refine the “why” underlying these various habits is the first step to eliminating cruft and restoring a common sense of purpose. At its core, they offer their people a reset from thinking about inputs to thinking about outcomes. Sometimes, this reset is expressed in dramatic fashion. One new executive leader stopped her staff mid-meeting and had them physically walk her through the process under discussion. It took them up and down floors and across offices in their sprawling headquarters. This experience made viscerally clear to everyone how broken ‘the way things have always been done’ truly was and established a new perspective on the status quo.
While a reset is the first step, all change is, in the end, a people challenge. We’ve seen great leaders do two things that make a difference.
The first is to identify people’s strengths and to give them the right roles and responsibilities. They ask where people fall on the exploit-explore spectrum to determine their comfort level with ambiguity. A helpful model in this regard is the pioneer, settler, town planner model, derived from Robert X Cringely’s “Accidental Empires.” Where pioneers love ambiguity and are open to failure, settlers know how to take advantage of reasonably well-defined opportunities, while town planners scale those opportunities, bringing structure and rigor.
The second is to mentor and hire people trusting that they can execute on the vision. Many leaders are afraid of individual initiative because it looks like chaos. But, strict alignment and predictability limit not just creativity; they also limit employee engagement. There’s ample evidence to suggest this directly harms competitiveness and growth.
There are simple steps effective leaders take to arm their people to adapt and stay focused. One example is the outcomes-driven roadmap, a framework that flips the typical product roadmap. Where a traditional roadmap focuses on features and strict timelines, the outcome-driven roadmap starts with “why.” In a way, it’s a more delimited and actionable extension of the overarching purpose great leaders articulate and continually communicate. While this framework does many things— including eliminating the risk from assumptions and aligning stakeholders with product teams—the most important result is to empower the team to solve problems rather than to implement features. This is just one example of a tool that effective leaders put in the hands of their people that gives them structure while freeing them to solve problems on their own.
Lastly, we’ve seen highly effective leaders stay close to the people their organizations serve. We recently had the opportunity to work with Heather Hage, President of the Griffiss Institute, a STEM talent and technology accelerator in New York’s Mohawk Valley. She maintains an extensive network where she is able to effectively leverage partnerships. She is also hyper engaged with the wider ecosystem of partners and stakeholders to understand their needs, fostering open innovation, bridge building, and co-creation. It is these activities that underpin her ability to fully mobilize the latent wisdom and energy in her network, while, at the same time, to create a feedback loop that makes real to her entire organization the elements outlined above. Purpose, trust, and flexibility are all things that take on new urgency when you see an effective leader bring them to life with the people—both within and without—who matter most to the organization.
As the business theorist Roger Martin outlines in his book Creating Great Choices, leadership is at its core a series of decisions. What we have observed is that organizations that “win” have leaders whose decisions add stability to what is otherwise a turbulent gap between exploitation and exploration. At an organizational level, doing only one of these well impedes or undermines success. But, the magic happens not in the abstract, but in the specific choices great leaders make. We’ve seen them deftly balance the two in multiple, practical ways.
